Tuesday, June 23, 2009

Sazerac Acquires Old Taylor.

Sazerac, the parent company of bourbon-maker Buffalo Trace, has acquired the Old Taylor brand and inventory from Beam Global Spirits and Wine, it was announced today. In return, Beam gets Effen Vodka.

Old Taylor is a venerable bourbon with 19th century origins. It was named for its owner, E. H. Taylor, Jr., a banker who used his financial acumen to acquire and develop several major distilleries, including the one now known as Buffalo Trace. He had, however, a fraught relationship with that distillery’s owner at the time, George Stagg. Since they together had sold a bourbon under the Taylor name in happier days, Stagg sued to prevent Taylor from using the name. He lost.

The Taylor distillery still stands, albeit in ruins, on the outskirts of Frankfort, adjacent to the ruins of Old Crow, in which Taylor also had an interest. A few years ago, Trace looked at buying the Old Taylor Distillery but ultimately passed.

Beam acquired the Taylor brand, along with Old Crow and Old Grand-Dad, when it bought National Distillers in 1987. I've always felt that Beam should either do something with those distinguished brands or sell them. Now they have, at least one of them.

As an indication of the current shortage of fully aged bourbon, the sale included enough Beam whiskey to support the Taylor brand until Buffalo Trace can make it from their own stocks. (Old Taylor is a 6-year-old straight bourbon.) Both Beam and Trace make a lot of whiskey and Taylor is a small brand, so clearly supplies are strained enough that whiskey needed to be part of the deal.

Sazerac/Buffalo Trace, Old Taylor's new home, has been making some interesting moves lately, with the acquisition of the Constellation/Barton portfolio (which is how it got Effen) and the Tom Moore Distillery in Bardstown, but they haven't said much about what they intend to do with them, except that acquiring Barton’s super premium bourbon, Ridgemont Reserve 1792, was the primary goal. Now this.

It will be fascinating to see what Trace does next.

By the way, announcements about the deal came from both Beam and Sazerac. Beam’s was primarily about them acquiring Effen which--and this is hilarious--they claim is named after the Dutch word for 'smooth.' Yeah, right!

Here is how Buffalo Trace is spinning the acquisition.

“We are ecstatic about this transaction,” said Mark Brown, president and CEO of Buffalo Trace Distillery. “Part of our family is returning and we are thrilled to welcome home a true bourbon whiskey pioneer.”